Managing the Enterprise Customer Relationship
(Part 1) by
Managed service providers (MSPs) face common challenges and
opportunities in the management of complex relationships while
delivering solutions to the enterprise customer. In this series,
we will cover several important aspects of "Managing the
Enterprise Customer Relationship."
Companies in the high-tech/MSP industry often focus their Sales
and Marketing efforts primarily on product "feature/function."
Significant investments are poured into adding new bells and
whistles to the product. Keep in mind, features and functions are
an important focus when introducing a new product. Moreover, for a
company's product to remain progressive, it must have updated
features and functions. However, for an MSP, features soon become
a commodity, putting the MSP in the position of competing solely
on price and missing the mark in meeting customers' expectations.
Delivering value beyond the product features and functions will
differentiate your company from the competition and enable you to
meet or exceed customer expectations. This extra value is created
when you effectively align your resources to truly "manage" the
customers' experience. Isn't this what the customer of a managed
service provider is expecting?
Let's play out a scene that demonstrates the DIRECT result of not
effectively managing the enterprise customer relationship:
You are an MSP. One of your customers has experienced continued
business growth, leading to increased use of your
service/solution. The customer's technical resources are in daily
communication with your service team working (what appear to be)
"minor performance issues." Your service reps do their best,
efficiently processing "tickets" that document individual (yet
recurring) incidents experienced by the customer. During a
particular incident, a service representative casually remarks "I
think it is time you upgrade your memory (or CPU, disk, operating
system, software revision, etc.)." The customer's technical
contact isn't authorized to approve this "casually suggested"
upgrade, and besides, he knows that if the problem occurs again,
he can count on your service team to respond. Upon hanging up
(problem presently resolved), each moves on to the next item on
their list. Neither person is feeling any particular ownership of
the "recurring issue." This cycle happens with increasing
intensity until…the customer hits a wall: the "solution" goes down
during prime business hours. You are unable to immediately bring
the solution back online, causing the customer significant
Who is to blame? You, the Managed Services Provider. What went
wrong? Your resources were not aligned to manage the customer's
Have you seen this movie before? Do you like the ending? There is
a better way…
To understand how to properly align your resources, you must first
understand some dynamics of the players involved. In the next
issue, we will present the "Four Quadrants of the Customer
Relationship." Upcoming issues will discuss approaches to ensure
you experience a better ending.
If you would like to learn more about overcoming the common
challenges that managed service providers face with their
enterprise customers, and would prefer not to wait until the
completion of this series of our newsletter, feel free to contact
us. We would be happy to brainstorm with you on the challenges and
opportunities you are facing and share proven approaches that have
helped managed service providers address similar situations.
View previous articles in this series
A Logistics Perspective (Part 3):
Becoming -- and Remaining -- a Preferred Supplier
We have talked about Preferred Suppliers as those perceived by
their customer as being easy to do business with and who provide
higher service value than their competitors. We looked at some
characteristics typically shared by preferred suppliers;
specifically that they do a good job, minimize the effort and cost
of supply, and act as good partners conscientiously ensuring
effective communications and common understandings. We also
acknowledged that these considerations involve humans, ensuring a
certain potential of irrationality compounding the "quirkiness"
normally associated with perception.
From the logistics perspective, it's safe to conclude that
becoming and remaining a better performing supplier than your
competitors is one of the higher-percentage roads to preferred
supplier status. Another advantage of this approach is that it is
the least susceptible to falling in and out of favor with the
customer. The trickier part lies in knowing when you are better
(so you can work on making your customer see that you are) or,
obversely, when you're not and why (so you know what to fix). In
this and the next article, we present 4 suggested strategies for
becoming, and remaining, a preferred supplier.
Strategy 1 – Talk to Your Customer
A good place to start is usually your customer, who probably knows
what supplier actions are valued and can fill you in on his
perception of how well or badly you're doing. A note of caution:
Be sure the review is thorough and that it covers all aspects of
your supply performance. Avoid getting bogged down in anecdotes of
specific problem areas, further eroding perception. Be prepared
that your customer, quite naturally, wants to dwell on your
relative weaknesses rather than extol your virtues.
It's a good idea to take along a checklist, one that you used in
preparing for this review by filling in your side of the form with
the facts as you know them along with your expectation of your
customer's views. The checklist needs to include your metrics for
the various service goals you prioritize, other measures that may
be utilized by your customer, and business review information
including volume growth, special requests that were met, order
management and other systems improvements, etc. When you have
finished the meeting, document the results to all parties present
and quickly follow up on any points of disagreement and misaligned
data. Get back to everyone with clarifications and corrections.
This will put both you and your customer are on the same page and
ensure you understand where problems and issues lie and that your
customer is aware of your strengths.
Where problems and issues are identified, it is important to
devise solutions and create action plans identifying how and when
they will be achieved. These need not (and maybe should not) be
decided at the meeting, but they must be timely in their
preparation, in their communication back to the customer and in
their enaction to demonstrate responsiveness and the strong desire
to service your customer well.
Strategy 2 – Talk to Your Partners
Collaboration is a way an enterprise corresponds with its supply
chain partners. As an ideal, it depicts a relationship in which
partners jointly devise better plans by sharing information and
decision-making. In practice it can mean as little as the
willingness of trading partners to exchange little more than
requirements and fulfillment commitments so as to increase
long-term supply and demand planning horizons. Whichever view is
yours, it points in the right direction. Unfortunately, as a buzz
word, collaboration is advertised as a relationship that is just
between you and your customer. Restricting its application to just
that channel also restricts the range of benefits that are
available. To readers of this newsletter, the advantages of the
broader view are obvious.
We have all heard the expression that "companies don't compete,
supply chains do." That may be an extreme view, but I have seen
the 2nd half of the expression bear out numerous times; namely,
that "supply chains compete." As a long-time user and proponent of
outsourcing, I have repeatedly enjoyed the luxury of having
another company help me solve my problems and extend my
capabilities. This is particularly relevant to striving for
performance improvement when that company has additional expertise
and the wherewithal to apply it. There are a lot of supply
considerations and it can be very expensive to be great at all of
them. If you chose your service providers well, they are experts
in their field and they also want to be your preferred supplier.
In the next installment, we will discuss 2 more strategies. The
final chapter of this series will present some of the more common
pitfalls incurred in striving for Preferred Supplier status
without proper motivation, planning and guidance.
View previous articles in this series.